Treatment of stale cheque

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BHASKAR AUDDY (Querist)
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09 May 2011 The accounting year of the finacial year ends on 31st March, on that date the finacial statement prepared. While checking the bank reconcilation statement we have noticed that some of the cheques issued by the client and remaining outstanding as on 31st March have become stale during April, subsequent to March.
Should we ask the client to reverse the cheques as on 31st March i.e. as on the date of the financial satement.

The client is of the view that the event occurs after the date of the financial statement, these need not be reversed.

Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)
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09 May 2011 It is better to reverse the cheques on 31st March because at the time of audit, the fact is clear that the cheques are stale, so provision of reversal should be made on 31st March only.

BHASKAR AUDDY

BHASKAR AUDDY (Querist)
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09 May 2011 Thanks for the info!
Can you give any reference of the ICAI publication.

Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)
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09 May 2011 There is no specific publication on this. But refer to the Accounting Standard 4 - Contingencies and Events Occurring after the Balance Sheet Date.

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